Look at what Gold Doing !! Still think there won't be a recession?, page
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reply posted on 19-9-2005 @ 09:56 PM by Zaphod58
A closer relationship exists between gold prices and inflation, that is, the rate of change in the general price level. Two periods particularly stand out: The high inflation of the early 1980s is matched by high gold prices, which definitely appear to "lead" the CPI inflation rate by about a year, a relationship that doesn't break down until 1988. The most recent decrease in the inflation rate also corresponds to a drop in gold prices, though that relationship is much more synchronous, without a clear lead or lag time.

A scatterplot diagram of high-lights the relationship more fully. The slope of the line suggests that a $100 rise in the price of gold is associated, on average, with higher inflation in the following year of 2.4 percent-age points. While gold prices do tell us some-thing about the inflation rate, it need not be either that inflation raises gold prices or that higher gold prices cause inflation. Some third factor, such as the money supply, may influence both.

www.gold-eagle.com...

Basically what it means is that mines have cut production, or are using a lower grade ore to drive prices up to make extra money. While gold and inflation are tied toegether somewhat, if you read that link, you'll see that there is a lot of gold that is stockpiled incase prices go higher, that they can release to bring prices back down. What happens is that if the price goes too low they artificially inflate the price by using a lower grade of gold, or by slowing down work at the mines, to bring prices back up somewhat.

[edit on 19-9-2005 by Zaphod58]


reply posted on 20-9-2005 @ 02:35 PM by Where2Hide2006
I think that since Super Storm Katrina and the "biblical" Flooding more people fear that the end of times, gods wrath is upon them. Fearing this they expect an economic collapse... Result, they buy more gold. More Demand for Gold Equals a higher selling price for Gold. As things get worse, the demand will increase and so will the price of gold.

Your Paper Money is worth nothing, Your Credit Cards, Bank Accounts, ... all of it. where is your true value if the economy collapses?

In 1920's in Germany they burned stacks of money to keep their houses and appartments warm. Because it cost less to burn the money then it did to buy gas/oil. This was the worst period of hyper- inflation in recorded history. Everything was too expensive, food wasn't even affordable anymore. And it wasn't because of shortages and the costs had to go up, no. It was because Paper Money lost its value almost overnight.


With all of the economic problems America is already faced with, including an illegal war in Iraq, and the 100 BILLION Dollar clean-up/mismanagement taking place in the aftermath of Katrina.

National Deficits the WORST in HISTORY. We are a Credit Card Nation, and eventually China and Japan are going to want their money back. Imagine China one day calls in all of our debts, because they are having their own problems, or because they are mad at us over Taiwan or N.Korea?

What if OPEC decides to use the yen or the Euro as its Oil Currency? Overnight you will see the dollar lose 50% of its value.
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